To ban or to tax? 'Tis the question for plastic bag legislation

To ban or to tax? 'Tis the question for plastic bag legislation

[This article has been corrected to reflect the fact that plastic bag recycling rates are between 5 percent and 10 percent. GreenBiz regrets the error.]

In the United States, the vast majority of cities and states have opted for a ban on plastic bags, often finding that any proposed “tax” is politically untenable and unpopular with retailers. Outside the United States, however, plastic bag taxes have been viewed as the business-friendly option, with retailers happy to pocket a percentage of the fees charged for single-use bags or to profit from increased sales of reusable bags.

On the environmental front, the jury is still out as to whether bans or taxes are more effective in the reduction of plastic bag usage and littering, but a recent study of the plastic bag tax in Wales can be seen as a win for tax proponents. It shows a 96 percent reduction in the usage of plastic bags since the tax was introduced in October 2011.

Ireland was similarly successful with its bag tax, instituted in 2002, which delivered a reported 90 percent reduction in plastic bag usage within a few months of its inception. Based on the success of the Irish and Welsh bag taxes, Northern Ireland is introducing a tax next April and Scotland recently proposed a tax as well.

Bag taxes have been successful elsewhere in Europe, and in India and China as well. “Hong Kong has taxed plastic bags for quite a few years and the policy has proven to have virtually no impact to retail business,” says Jason Chan, a Hong Kong native and consultant with International Enterprise Singapore (Singapore’s trade development board). “Consumers won't refrain from shopping at their favorite retailer just because of the innocent shopping bags policy and certain retailers started selling environmental friendly recyclable foldable shopping bags.”

San Francisco—the first city in the United States to ban single-use plastic bags—started out wanting to tax them. A proposed 17-cent tax on plastic bags was declared illegal, and so the city moved to ban them instead. That set a precedent for the rest of the state and, eventually, the country. In California, where a new municipal bag ban is seemingly passed every month, the latest round of bans tend to include a fee imposed on paper bags as well.

The inclusion of paper bags is a response to various lawsuits against California plastic bag bans. The lawsuits, brought by plastic bag proponents, sought to use an aspect of the California Environmental Quality Act (CEQA) – namely that no piece of environmental legislation have unintended negative impacts (in this case, a ban on plastic bags could increase the use of paper bags, thereby harming the environment) – to repeal bag bans.

Washington D.C. bucked the ban trend with its bag fee—a simple, 5-cent fee charged for any single-use bag, paper or plastic. The money is used to build sewer grates that prevent trash from entering the Anacostia River.

Despite D.C.’s success (the district raised about $2.5 million with its bag fee in the first year of its implementation), the vast majority of other U.S. cities and states are pursuing bag bans, as are the majority of cities and countries worldwide. To date there are nearly 250 pieces of legislation aimed at reducing plastic bag use worldwide, the vast majority of which are bans, according to the Plastic Pollution Coalition, a nonprofit that aims to reduce single-use plastics and collects data on various global efforts.

In all cases, opponents of bag taxes or bans tend to call them bad for business. But while there’s always at least one retailer willing to complain publicly that a bag ban or tax will annoy their customers and cost them sales, the primary business opponents to bag legislation are typically not retailers but plastic bag manufacturers.

“In the United States, more than 30,000 Americans are employed by the plastic bag manufacturing and recycling industry.,” says Mark Daniels, Chair of the American Progressive Bag Alliance, “Bag bans and taxes put these jobs at risk at a time when we should be supporting the creation of new ones. “

One option that seems to be neglected by both sides of the debate is recycling. While plastic bags are recyclable, recycling rates are woefully low (5 percent to 10 percent, depending on whose numbers you believe).

“Instead of bans or taxes, you could have the plastic bag manufacturers pay to build up the infrastructure around the collection and recycling of bags,” says Conrad Mackerron, senior program director at the As You Sow foundation, which works with a number of large companies such as Coca Cola to reduce waste and increase recycling. “Then in five years time if the recycling rates were still low, there would be more of a justification for banning or taxing them.”